Once again, the subscribers of civil real estate investment companies (SCPI) may be satisfied with their investments. In 2019, the average yield offered by paper stone averaged 4.40% according to Aspim (French Association of Real Estate Investment Companies) and IEIF (Institute of Real Estate and Land Savings). But many management companies have managed to generate a much more attractive performance than this market average, as shown the classification made by France SCPI for Capital.
As a reminder, the operation of the investment in SCPI consists for an individual in subscribing for shares in a company which acquires and manages a real estate stock made up of buildings (shops, offices, nursing homes, hotels, etc.). It is the rental of this tertiary real estate which allows the SCPI to generate rents to which are added any capital gains from the sale of certain buildings to be transformed into dividends for the investor. The value of the share also changes, by 1.20% on average in 2019 (against + 0.8% in 2018), and makes it possible to realize a capital gain on sale.
Returns… and risks
Please note, however, that this type of investment is not liquid. To this risk is added that of capital loss to which the subscriber is exposed. A too large rental vacancy of the SCPI plays in fact on the yield served, just like an overly expensive acquisition of tertiary premises by the management company. The financial occupancy rate (around 95% ideally) must therefore be scrutinized before investing, just like the rate of collection. Because more capital in the SCPI, it is also more investments to be made while maintaining a standard return. An equation that is sometimes difficult to solve, the most profitable assets becoming scarcer with the influx of liquidity on the SCPI market. Another factor to take into account, fees, generally high on SCPIs, at the entry, but also during the period of detention as well as at resale. You should therefore plan to keep your shares at least 8 years to cover these costs.
>> Read – Resale of SCPI shares: here's how to get your stake back
Rates between 2.88% and 6.81%
As illustrated in the comparative table below, yields vary very widely depending on the SCPI. While Kyaneos Pierre (Kyaneos AM) achieves a performance of 6.81% and occupies first place in the ranking ahead of Neo, SCPI launched by Novaxia in July 2019, with a market value distribution rate (TDVM) of 6.47 %, other SCPIs find it very difficult to make the comparison. This is particularly the case for office SCPIs, which offer yields of less than 5%, with the exception of Primopierre (Primonial REIM) and a TDVM of 5.92%. Opus Real (BNP Paribas REIM France) closes the ranking with a performance of 2.88%.
To help you compare and choose, you can find below the performances of the main SCPIs on the market.
Source: France SCPI